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From The Socialist newspaper, 22 November 2007

GM, Chrysler, and Ford's 'race to the bottom'

Union leaders' historic sell-out of workers

WITH THEIR industry caught in a deep crisis of overcapacity, the 'Big Three' auto companies demanded brutal concessions on all fronts, and the United Auto Workers' (UAW) union leadership delivered. In a series of carefully-orchestrated contract votes at General Motors, Chrysler, and Ford, the UAW bureaucracy is pushing through a sell-out of historic proportions.

Ty Moore, Socialist Alternative, USA

The contracts contained no guarantees against fresh waves of layoffs, and within days of the Chrysler deal the company announced 11,000 job cuts. The Detroit area already suffers under the highest unemployment rate in the country.


The contracts also mean new hires will start at $14 per hour with minimal health benefits, down from $28 before. The two-tiered contracts will divide the union, paving the way for future attacks on the wages, benefits, and retirement of longer-standing autoworkers, who still receive higher pay and benefits.

The Big Three are also off-loading health and retirement obligations for their 600,000 retirees onto the UAW in the form of 'Voluntary Employee Beneficiary Associations'.

The VEBAs will be private insurance schemes managed by the UAW. But the auto companies only agreed to pay part of the tens of billions of dollars they owe their retirees. The remainder is supposed to be raised through investing the funds. But the VEBAs at Detroit Diesel and Caterpillar, set up in the 1990s by the UAW, have run out of funds leaving retirees to fend for themselves.

In another stunning move, the UAW is accepting, as payment for part of Ford's VEBA obligations, a 16% share in Ford stocks! This deal ties the union's own financial future to Ford's profitability; in other words, to more layoffs and concessions.

"These deals are the bitter fruit of the 'non-adversarial… teamwork with the companies' approach [of] the UAW and most other unions," Todd Jordan, a leading UAW dissident, told Justice [The newspaper of Socialist Alternative]. The contracts represent an "historic collapse."

Capitalist logic

The auto industry, and the US economy as a whole, is caught in a classic "crisis of overproduction," or overcapacity. The results are also classic: bankruptcies, mass layoffs, factory closures, and deep attacks on wages and conditions.

As long as the UAW leaders accept the logic of the capitalist market, autoworkers will remain defenceless in the face of a continuous corporate assault.

This country is wealthier than ever. More than enough exists to provide a good life for all. If this system can't afford to meet our needs, then we can't afford this system.

If GM, Chrysler, and Ford can't maintain profitability while upholding union wages and benefits, then we should fight to take them under public ownership and democratic workers' control.

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In The Socialist 22 November 2007:

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New attacks on incapacity benefits

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GM, Chrysler, and Ford's 'race to the bottom'

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